Analyst Mehdi Hosseini, who has a positive rating on Taiwan Semiconductor (TSM) shares, said he thinks gross margins could be strong due to the average selling price for wafers, moderation in depreciation and amortization, "favorable" foreign exchange rates and better utilization rates.
A consensus of analysts expect Taiwan Semiconductor to earn $1.16 per share on $16.64B in revenue for the third-quarter.
Hosseini also said that there is a lack of visibility on wafer shipments for the second-half of 2024, especially around smartphone applications.
"All in all, while inventory overhang for broader Semis is expected to sustain into [the first-half of 2024], TSM is expected to weather the storm given all the "new" GPU/CPUs products ramping with better than feared [gross margin]," Hosseini wrote in an investor note. "This has been the base of our [upgrade] since early 2023, and further underscored by the recent upsides."
Taiwan Semiconductor (TSM), which still reports monthly sales, including giving an update on September earlier this month, likely generated a 13.7% sequential increase in third-quarter revenue, above its own guidance, aided by artificial intelligence and the Android smartphone supply chain, Hosseini posited.
"TSM is outperforming the peer group like UMC and the overall Semi industry as it benefits from customers' new products ramps," Hosseini explained, adding that he expects fourth-quarter revenue guidance to be up 8% to 10% sequentially, aided in part by higher wafer shipments and higher selling prices.
Hosseini added that he still expects Taiwan Semiconductor (TSM) to report capital spending plans of about $32B for 2023, with commentary suggesting a 10% to 15% decline year-over-year for 2024 to about $28B, due in part to increased equipment reuse, continued delays in its Arizona fab plant and the lack of visibility on the second-half capacity needed by Apple (AAPL).
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A consensus of analysts expect Taiwan Semiconductor to earn $1.16 per share on $16.64B in revenue for the third-quarter.
Hosseini also said that there is a lack of visibility on wafer shipments for the second-half of 2024, especially around smartphone applications.
"All in all, while inventory overhang for broader Semis is expected to sustain into [the first-half of 2024], TSM is expected to weather the storm given all the "new" GPU/CPUs products ramping with better than feared [gross margin]," Hosseini wrote in an investor note. "This has been the base of our [upgrade] since early 2023, and further underscored by the recent upsides."
Taiwan Semiconductor (TSM), which still reports monthly sales, including giving an update on September earlier this month, likely generated a 13.7% sequential increase in third-quarter revenue, above its own guidance, aided by artificial intelligence and the Android smartphone supply chain, Hosseini posited.
"TSM is outperforming the peer group like UMC and the overall Semi industry as it benefits from customers' new products ramps," Hosseini explained, adding that he expects fourth-quarter revenue guidance to be up 8% to 10% sequentially, aided in part by higher wafer shipments and higher selling prices.
Hosseini added that he still expects Taiwan Semiconductor (TSM) to report capital spending plans of about $32B for 2023, with commentary suggesting a 10% to 15% decline year-over-year for 2024 to about $28B, due in part to increased equipment reuse, continued delays in its Arizona fab plant and the lack of visibility on the second-half capacity needed by Apple (AAPL).
Taiwan Semiconductor Q3 results likely to see margin upside, Susquehanna says
Taiwan Semiconductor (TSM) is slated to report third-quarter results on October 19 before the start of trading and investment firm Susquehanna is expecting the
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